Overcome Your Cash Flow Challenge Paul Trost Will Bloom Alan - PowerPoint PPT Presentation

Overcome Your Cash Flow Challenge

Paul Trost Will Bloom Alan Carlyle Managing Director Managing Director Senior Consultant Professional Fiduciary Services Chartwell Fifth Third Bank

OVERCOME YOUR CASH FLOW CHALLENGE I Situational Assessment Proactive Internal Financial II Review & Initiatives TODAY’S AGENDA Third-Party Funding III Resource Management IV ESOP Repurchase Obligations

Situational Assessment I Are you in a mandatory shut-down State/County? Will you be? Are you an Essential Business that can remain open? Will your suppliers continue to supply? Will your customers continue to buy?

Proactive Internal Financial Review and Initiatives II Working CAPEX Expense Capital Review Control Management ▪ Conserve Cash – Prioritize Defer Growth CAPEX ▪ Budget Review ▪ Fixed & Variable Costs Prioritize Maintenance ▪ Rent Abatement Options ▪ ▪ Accelerate Accounts CAPEX ▪ Variable Cost Receivable Measure Sensitivities Reductions ▪ ▪ Extend Payables ▪ Reduce Service Levels ▪ Inventory Management (if applicable) o Churn rate o Seek lower cost of goods

Third-party Funding Resource Management III Traditional Financing Sources – Commercial Banks: 1 PRINCIPAL PAYMENT REVOLVER DRAW 2 HOLIDAY 1 3 2 INTEREST ABATEMENT 3 4 COVENANT WAIVERS WAIVE EXCESS CASH FLOW 5 4 RECAPTURE 5

Third-party Funding Resource Management (Cont’d) III Traditional Financing Sources (Cont’d): Non-Bank Loan Market: Private Equity: Stretch Asset-Based Lending Distressed Liquidity Lines Institutional Retail Mezzanine Financing

Third-party Funding Resource Management (Cont’d) III Secondary Financing Sources: Government Programs SBA Disaster Relief Paycheck Protection Commercial Business Payroll Tax Credit Payroll Tax Deferral Loans Program (PPP) Interruption Insurance Resources * ▪ U.S. Department of Labor: https://www.dol.gov/coronavirus ▪ U.S. Small Business Administration: https://www.irs.gov/coronavirus ▪ IRS Coronavirus Tax Relief: https://www.sba.gov/disaster-assistance/coronavirus-covid-19 *Please consult your legal and tax advisors for detailed information on any programs mentioned herein

Third-party Funding Resource Management (Cont’d) III Secondary Financing Sources (Cont’d) : Fin-Tech SMB Bridge Loans Factoring Facilities Secondary Financing Sources ESOP Seller Notes Senior Management Team Reinvestment

ESOP Repurchase Obligations IV RO Management Options: Key Considerations: ▪ Plan Document Review ▪ Communications ▪ Distribution Planning & Timing o Plan Participants ▪ Termination, Diversification, & o Trustee Segregation Practices o Advisors: ESOP Counsel, TPA, ▪ Interim Valuation Financial Advisor ▪ Covenant Waiver Requests ▪ Historical Practices & Distribution Policy ▪ Conversion to Notes ▪ Plan Amendment ▪ Fairness Considerations ▪ IRS Discrimination Test ▪ Associated Fees

Thank You Will Bloom, Alan Carlyle, Paul Trost will.bloom@chartwellfa.com alan.carlyle@53.com Trost@professional-fiduciary.com